Symbolic boundaries, understood as the conceptual distinctions used to demarcate in-groups and out-groups, are fundamental to social inequality. While we know a great deal about how groups and individuals construct and contest symbolic boundaries along lines of class, race, ethnicity, religion, and nationality, less attention is given to (a) national belonging as a component of symbolic boundaries distinct from citizenship and (b) comparing how distinct symbolic boundaries shape individuals perceptions of, and reactions to, instances of stigmatization and discrimination. To examine these issues we compared two marginalized groups in Israel, Arab Palestinian citizens and Ethiopian Jewish immigrants. Analyzing 90 in-depth interviews, we find that exclusion based on boundaries of nationality engenders different ways of interpretating and responding to stigmatizing and discriminatory behavior, compared with exclusion based on racial and ethnic boundaries. While Ethiopians see everyday stigmatizing encounters as part of their temporary position as a recently immigrated group from a developing country, and react accordingly with attempts to prove their worth as individuals and ultimately assimilate, Palestinians view the line between them and the Jewish majority as relatively impermeable and attempts to fully integrate as mostly useless, viewing solidarity and education as a means to improve their group’s standing.